Tourism and Gaming Industry Impact - In 2021, the number of tourists in Macau decreased by approximately 80.4% and 85.0% compared to pre-pandemic levels in 2019, significantly impacting the tourism and gaming industries[18]. - Revenue from the management of casinos in Macau was HKD 415.7 million, up from HKD 303.1 million in the previous year, reflecting a significant recovery in the gaming sector[29]. - The total gaming revenue from live mixed gaming machines in Macau increased by 48.4% to HKD 1.37 billion for the year ended December 31, 2021, compared to HKD 923 million for the previous year[22]. - The proposed amendments to the gaming law in Macau are expected to promote sustainable development in the gaming industry, focusing on the diversification of the mid-market customer base[25]. - The company emphasizes the importance of providing affordable minimum betting amounts to attract a diverse and loyal customer base in the competitive market[13]. Company Innovation and Development - The company aims to become a leading supplier of entertainment equipment and systems, focusing on the development of automated gaming tables and innovative technologies to enhance gaming efficiency[14]. - LT Game has successfully launched self-developed gaming machines in local, North American, and other overseas markets, with plans to introduce more new gaming machines to expand market presence[14]. - The company continues to invest in innovation and development of electronic entertainment equipment and systems, aiming to provide comprehensive solutions for future market needs[14]. - The company has developed and launched smart wearable products that utilize AI technology to collect, track, and monitor real-time health data, improving users' health management[15]. - The company continues to invest in the development of AI and high-tech products related to health and wellness, showcasing its latest products at the China International Import Expo[23]. Financial Performance - The total revenue reported for the year ended December 31, 2021, was HKD 494.1 million, an increase of 40.5% compared to HKD 351.7 million for the year ended December 31, 2020[28]. - The adjusted EBITDA for the year ended December 31, 2021, was a loss of HKD 18.4 million, compared to a loss of HKD 101.1 million for the year ended December 31, 2020, indicating a significant improvement[32]. - The total loss for the year ended December 31, 2021, was HKD 88.4 million, compared to a loss of HKD 192.1 million for the year ended December 31, 2020, reflecting improved financial performance[39]. - The electronic gaming equipment and systems segment reported an adjusted EBITDA loss of HKD 21.2 million for the year ended December 31, 2021, an improvement from a loss of HKD 71.6 million in the prior year, driven by increased demand in Macau and overseas markets[35]. - The company reported a total revenue of approximately HKD 317,051,000 available for distribution to shareholders as of December 31, 2021[110]. Market Expansion and Strategy - The company aims to expand its overseas market presence despite challenges posed by the pandemic and global economic fluctuations[21]. - The company plans to continue expanding into suitable overseas markets while remaining cautious due to ongoing uncertainties, particularly related to U.S.-China relations[61]. - The company aims to identify new business opportunities in Macau and overseas markets to enhance profitability and shareholder value[58]. - The company remains cautiously optimistic about the performance of its live hybrid gaming machines, which are expected to continue to perform well, especially as they address health and safety concerns in casinos[62]. Corporate Governance and Compliance - The company is committed to compliance with all relevant laws and regulations, having implemented internal compliance and risk management policies[148]. - The board believes that corporate governance is key to the company's success and has implemented various measures to ensure high standards[179]. - The company has disclosed deviations from the corporate governance code in its annual report[179]. - The board has established a nomination policy to ensure suitable candidates are nominated for director positions, including procedures for election and appointment[193]. - The independent auditor provided an unqualified opinion on the group's disclosure of continuing connected transactions[156]. Employee and Operational Management - The total employee cost, including director remuneration, was HKD 255.2 million, a decrease of 13.2% from HKD 293.9 million in 2020[81]. - The company employs approximately 740 employees, including about 370 gaming business employees[81]. - The company is focused on cost control measures, including streamlining operations and reducing marketing expenses, to enhance efficiency and maintain sustainability amid the pandemic[58]. - The company has maintained a public float of at least 25% of its issued shares, complying with listing rules[175]. Shareholder and Financial Structure - The total equity attributable to shareholders was approximately HKD 1,042,083,000, offset by accumulated losses of HKD 725,032,000[110]. - The company's asset-to-liability ratio as of December 31, 2021, was 41.2%, an increase from 34.1% in 2020[73]. - The company has capital commitments for the acquisition of property, plant, and equipment amounting to HKD 4.8 million as of December 31, 2021, compared to HKD 1.1 million on December 31, 2020[75]. - Approximately 97.3% of the company's total revenue was generated from its top five customers, with the largest customer accounting for about 90.3% of total revenue[147]. Legal and Regulatory Considerations - The company is closely monitoring legal and regulatory changes in Macau's gaming laws, which may significantly impact the operations of satellite casinos[65]. - The company has not entered into any significant transactions with directors or related entities during the year ending December 31, 2021[162]. - The company did not engage in any significant acquisitions, disposals, or major investments during the year ended December 31, 2021[79].

Paradise PARADISE ENTERTAINMENT LIMITED 滙 彩 控 股 有 限 公 司 * (於百慕遮註冊成立之有限公司) (股份代號：1180) 2021 中期報告 MIX Paper from ponsible sourc F8C" C111999 FSC * 僅供識別 公司資料 2 管理層討論及分析 3 企業管治及其他資料 13 簡明綜合財務報表審閱報告 17 簡明綜合損益表 18 簡明綜合損益及其他全面收益表 19 簡明綜合財務狀況表 20 簡明綜合權益變動表 21 簡明綜合現金流量表 22 簡明綜合財務報表附註 23 釋義 47 目錄 頁次 公司資料 | --- | --- | |--------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------ ...

Business Segments and Strategy - Paradise Entertainment Limited focuses on two main business segments: casino management services and the development, sales, and leasing of electronic gaming equipment and systems[10]. - The company aims to become a leading supplier of gaming equipment and systems globally, emphasizing the development of innovative technologies to enhance gaming efficiency[10]. - LT Game, a subsidiary, has established a dominant position in the Macau ETG market and continues to invest in the development of new gaming machines for both local and overseas markets[10]. - Paradise Entertainment Limited is committed to providing high-quality integrated solutions in smart health, smart sports, smart home, and wireless communication products[10]. - The company has established a significant customer base by offering affordable minimum betting amounts, attracting a diverse and loyal clientele[10]. - The company is positioned to leverage synergies between its two main business segments to enhance its competitive advantage in the gaming market[10]. - The company has increased investment in AI and high-tech products, launching the "Big麦客 AI Watch" with various health monitoring features[19]. - The group is increasing R&D investment to innovate in artificial intelligence and high-tech products, aiming to meet the demand for professional solutions in education, sports, and lifestyle[58]. Financial Performance - The total revenue for the year ended December 31, 2020, was HKD 351.7 million, a decrease of 70.2% compared to HKD 1,181.8 million for the year ended December 31, 2019[29]. - The adjusted EBITDA for the year ended December 31, 2020, was a loss of HKD 101.1 million, compared to a profit of HKD 87.0 million for the year ended December 31, 2019[33]. - The group incurred a loss of HKD 192.1 million for the year ended December 31, 2020, compared to a profit of HKD 10.6 million for the year ended December 31, 2019[36]. - The total gaming revenue in Macau for the year ended December 31, 2020, was HKD 60.4 billion, a decline of 79.3% from HKD 292.4 billion in 2019[25]. - The sales of electronic gaming equipment and systems decreased to HKD 20.9 million in 2020 from HKD 169.9 million in 2019[30]. - The adjusted EBITDA from the managed casinos was a loss of HKD 60.5 million for the year ended December 31, 2020, compared to a profit of HKD 114.0 million for the year ended December 31, 2019[35]. - The group’s total revenue from the managed gaming venues was HKD 326.4 million for the year ended December 31, 2020, a decrease of 67.5% from HKD 1,004.2 million for the year ended December 31, 2019[44]. Impact of COVID-19 - The COVID-19 pandemic has significantly impacted the group's operations, leading to a reduction in customer numbers at managed casinos due to government restrictions[51]. - The company has adjusted its operational strategies to address the challenges posed by the pandemic[17]. - The Macau government received praise for its effective response to the pandemic, which helped mitigate the impact on the local economy[17]. - The group faced significant challenges due to government restrictions on casino operations, including limits on the number of gaming tables and machines[35]. - The group has implemented various cost control measures, including reducing marketing expenses and negotiating lower rents, to mitigate the adverse effects of the pandemic[54]. Market Conditions and Recovery - Macau's gaming revenue decreased by 79.3% from MOP 292.4 billion in 2019 to MOP 60.4 billion in 2020[14]. - The number of visitors to Macau dropped by 85.0%, from 39.4 million in 2019 to 5.9 million in 2020[14]. - Future economic recovery in Macau is expected to be driven by the tourism sector, with gradual lifting of travel restrictions[21]. - The group maintains a cautious outlook for 2021 due to geopolitical and economic challenges, while remaining optimistic about the long-term prospects in Macau[59]. Corporate Governance and Compliance - The company has adopted various measures to ensure high levels of corporate governance, which is considered key to its success[166]. - The board believes it has complied with the corporate governance code, with some deviations disclosed in the report[166]. - The independent auditor provided an unqualified opinion on the company's related party transactions for the year ended December 31, 2020[138]. - The company has implemented internal compliance and risk management policies to ensure adherence to regulatory requirements[131]. - The board regularly receives updates on regulatory developments to ensure compliance with corporate governance standards[185]. Shareholder and Financial Structure - The company did not recommend a final dividend for the year ended December 31, 2020, compared to zero in 2019[92]. - As of December 31, 2020, the company's distributable reserves amounted to approximately HKD 404,617,000, including retained earnings of about HKD 1,042,083,000, offset by accumulated losses of approximately HKD 637,466,000[97]. - The total number of shares held by the executive director Mr. Chan Kit has a beneficial interest of 124,160 shares, and he holds 630,836,720 shares through a controlled corporation, representing 59.95% of the total shares[105]. - The company has no management or administrative contracts related to its significant business operations for the year ended December 31, 2020[101]. - The company has maintained a sufficient public float, with at least 25% of issued shares held by the public as of the report date[162]. Employee and Management Information - The total employee costs for the year ended December 31, 2020, were HKD 293,900,000, a decrease from HKD 452,600,000 in 2019, including HKD 137,400,000 payable to employees hired by third parties[71]. - The group has a total of approximately 770 employees as of December 31, 2020, including about 380 gaming staff employed by a third party[71]. - The monthly salary for executive directors was revised from HKD 1,000,000 to HKD 200,000 and from HKD 20,000 to HKD 10,000 as of July 1, 2020[158]. - The board of directors held a total of 8 meetings and 1 annual general meeting during the year ended December 31, 2020[172]. Research and Development - The group continued to invest in electronic entertainment equipment and systems, with research and development costs amounting to HKD 64 million for the year ended December 31, 2020[36]. - The company has invested F million in research and development to drive technological advancements in gaming equipment[86].

Revenue Performance - For the six months ended June 30, 2020, the total reported revenue was HKD 177.3 million, a decrease of 70.1% compared to HKD 592.0 million for the same period in 2019[9]. - Revenue from the managed casinos was HKD 165.9 million, down from HKD 499.2 million in the previous year, with specific declines in the Golden Dragon Casino and the Grand Lisboa Casino[12]. - The sales of electronic gaming equipment and systems generated revenue of HKD 11.4 million, a significant drop from HKD 92.8 million in the prior year[12]. - Total gaming revenue for the group was HKD 262.4 million for the six months ended June 30, 2020, a decrease of 58.8% compared to HKD 636.5 million for the same period in 2019[24]. - The group reported a total revenue of HKD 165.9 million for the six months ended June 30, 2020, down 66.8% from HKD 499.2 million for the same period in 2019[25]. - The electronic gaming equipment and systems segment reported an adjusted EBITDA loss of HKD 44.2 million for the six months ended June 30, 2020, compared to a profit of HKD 12.1 million in 2019[17]. Impact of COVID-19 - The Macau government announced the suspension of all casinos starting February 5, 2020, which significantly impacted customer confidence and consumption patterns in the gaming industry[7]. - The total gaming revenue in Macau for the first half of 2020 decreased by 77.4% compared to the same period last year, reflecting the broader economic impact of the COVID-19 pandemic[7]. - The decline in gaming revenue was primarily due to the temporary closure of the Golden Sands and Huadu casinos during the COVID-19 pandemic[16]. - The group reported a significant decrease in gaming revenue due to restrictions imposed by the Macau government to curb the spread of COVID-19[16]. - The number of visitors to Macau fell by 83.7%, from approximately 20.3 million in the six months ended June 30, 2019, to 3.3 million in the same period of 2020[31]. Financial Losses - Adjusted EBITDA for the six months ended June 30, 2020, was a loss of HKD 53.5 million, compared to a profit of HKD 63.3 million for the same period in 2019[13]. - The group recorded a loss of HKD 111.3 million for the six months ended June 30, 2020, compared to a profit of HKD 23.8 million for the same period in 2019[17]. - The adjusted EBITDA from the group's managed casinos was a loss of HKD 35.9 million for the six months ended June 30, 2020, down from a profit of HKD 66.3 million in 2019[16]. - The company reported a loss attributable to owners of the company of HKD 109,446,000, compared to a profit of HKD 19,446,000 for the same period in 2019[81]. - The net loss for the period was HKD 111,336,000, a significant decrease from the profit of HKD 23,793,000 reported in the same period last year[86]. Cost Control Measures - The group has implemented various cost control measures, including reducing marketing expenses and negotiating lower rents[32]. - The group decided not to renew the service contract for the Grand Lisboa Casino after it expired on February 29, 2020, as part of its cost control strategy[32]. - The total employee cost for the six months ended June 30, 2020, was HKD 171,700,000, a decrease of 19.6% from HKD 213,500,000 for the same period in 2019[49]. Business Strategy and Opportunities - The company is exploring other business opportunities in response to the pandemic's challenges[8]. - The group utilized its extensive network in China to provide procurement services for overseas clients, contributing positively to its performance during the pandemic[8]. - The group plans to continue exploring new business opportunities during the economic downturn[36]. - The group is investing in R&D for high-tech products, including 5G, AI, and smart devices, to position itself for sustainable growth post-pandemic[33]. Asset and Equity Management - The group's total assets decreased by HKD 119.5 million or 19.6%, from HKD 608.5 million as of December 31, 2019, to HKD 489 million as of June 30, 2020[38]. - The company's total assets amounted to HKD 626,737,000, with net current assets of HKD 234,739,000 as of June 30, 2020[88]. - The total equity attributable to the owners of the company was HKD 446,111,000, reflecting the company's financial stability despite recent losses[88]. - The company's total liabilities increased to HKD 594,614,000 as of June 30, 2020, compared to HKD 466,736,000 in the previous year[92]. Shareholder Information - Major shareholder August Profit Investments Limited held 630,836,720 shares, representing 59.95% of the company's equity[58]. - The group has not declared an interim dividend for the six months ending June 30, 2020[37]. - The company did not purchase, sell, or redeem any of its listed securities during the six months ended June 30, 2020[65].

Company Overview - The company operates as a leading provider of casino management services and electronic gaming equipment, focusing on the Macau gaming market since 2007[9]. - As of December 31, 2019, the company was the exclusive casino management service provider for two independent satellite casinos in Macau[9]. - The company’s major business involves providing casino management services and developing, selling, and leasing electronic gaming equipment and systems[94]. Product Development and Innovation - The company has developed a patented live mixed gaming machine system, dominating the ETG market in Macau[10]. - The company is investing in high-tech electronic gaming equipment and systems, including 5G and artificial intelligence technologies, to enhance customer experience[10]. - The company aims to simplify gaming processes and reduce labor costs through innovative product development[10]. - The company is committed to creating innovative products that optimize gaming productivity and enhance player experiences[10]. - The flagship product, the live hybrid gaming machine, saw increased sales due to strong demand for upgrades and new technical standards issued by the gaming authority[20]. - The company believes there is ample room for expansion in the live hybrid gaming machine business as the trend towards mass market gaming continues[20]. - The company has increased investments in R&D for high-tech products, including 5G and artificial intelligence, which are expected to generate new revenue streams in the coming years[20]. Financial Performance - The total revenue for the year ended December 31, 2019, was HKD 1,181.8 million, an increase of 1.5% compared to HKD 1,164.2 million for the year ended December 31, 2018[28]. - Adjusted EBITDA for the year ended December 31, 2019, was HKD 87 million, a decrease of 27.9% from HKD 120.7 million for the year ended December 31, 2018[31]. - The adjusted EBITDA from the group's managed casinos was HKD 114 million, a decrease of 42.3% compared to HKD 197.6 million for the previous year[34]. - The group recorded a profit of HKD 10.6 million, down 80.1% from HKD 53.2 million in the previous year[35]. - Sales of electronic gaming equipment and systems generated an adjusted EBITDA of HKD 88.1 million, compared to HKD 10.5 million in the previous year[35]. - The group reported a consolidated asset value of HKD 608.5 million as of December 31, 2019, a decrease of HKD 20.2 million or 3.2% from HKD 628.7 million on December 31, 2018[61]. - The group aims to invest in high-tech and pioneering entertainment products to explore more opportunities in the entertainment technology sector and expand its market share globally[60]. Market Trends - The mass gaming segment accounted for 53.8% of Macau's total gaming revenue in 2019, up from 45.2% in 2018, indicating a shift from VIP to mass market gaming[28]. - The total gaming revenue in Macau decreased by 3.4% to HKD 292,500,000,000, while the number of visitors increased by 10.1% to 39,400,000[53]. Customer and Supplier Relationships - The group reported that the top five customers accounted for approximately 98.4% of total revenue, with the largest customer contributing about 58.6%[145]. - The top five suppliers represented around 70.2% of total sales and service costs, with the largest supplier accounting for approximately 29.9%[145]. Employee and Compensation - As of December 31, 2019, the group had approximately 1,210 employees, including about 730 gaming business employees hired by 澳博 or 銀娛[73]. - Total employee costs for the year ended December 31, 2019, amounted to HKD 452.6 million, an increase from HKD 412.7 million in 2018[73]. - Compensation paid or payable to gaming business employees hired by 澳博 or 銀娛 was HKD 265.9 million for the year, compared to HKD 241.1 million in 2018[73]. - The company's compensation policy is based on qualifications, performance, industry experience, and market trends[74]. Corporate Governance and Compliance - The company believes that corporate governance is key to its success and has adopted various measures to ensure high levels of governance[200]. - The independent auditor has issued an unqualified opinion regarding the group's disclosed continuing connected transactions[158]. - The company has complied with the corporate governance code during the year ended December 31, 2019, with some deviations noted[200]. COVID-19 Impact - The group is cautious about the impact of the COVID-19 pandemic on operations, particularly in the casinos it manages, and is committed to taking protective measures for customers and employees[59]. - The company suspended operations at its gaming venues due to the COVID-19 outbreak, with the Golden Sands Casino reopening on February 20, 2020, and the Grand Lisboa Casino on February 24, 2020[188]. - The ongoing global health crisis may significantly impact the company's operations, cash flow, and financial condition, although the extent of the impact remains uncertain[188]. Strategic Agreements and Contracts - A strategic agreement with IGT was established in April 2016, allowing the company to receive non-refundable advance payments for patent rights and related technologies[10]. - The group will not renew or extend the service contract for the management of the Huadu Casino, which expired on February 29, 2020, and will focus on maximizing returns from the Golden Sands Casino operations[58]. - The management service contract for the Grand Lisboa Casino expired on February 29, 2020, and the company will no longer provide management services from March 1, 2020[189].

Revenue Performance - For the six months ended June 30, 2019, the total revenue reported by Paradise Entertainment Limited was HKD 592 million, an increase of 5.0% compared to HKD 563.9 million for the same period in 2018[7]. - Revenue from electronic gaming equipment and systems sales increased to HKD 89.3 million, up from HKD 49.9 million in the previous year, representing an increase of 78.8%[7]. - The revenue from the gaming operations at the Casino Kam Pek Paradise was HKD 347 million, down from HKD 374.6 million in the previous year, while the Casino Waldo's revenue increased to HKD 152.2 million from HKD 134.6 million[7]. - Total gaming revenue generated by the group’s two managed casinos was HKD 636,500,000 for the six months ended June 30, 2019, a decrease of 7.4% from HKD 687,500,000 in the same period of 2018[18]. - The segment revenue from management services was HKD 499,162,000, while the entertainment systems segment generated HKD 92,801,000, indicating a significant increase in entertainment systems revenue of 69% compared to HKD 54,766,000 in 2018[145]. Profitability Metrics - Adjusted EBITDA for the six months ended June 30, 2019, was HKD 63.3 million, a 6.0% increase from HKD 59.7 million for the same period in 2018[8]. - The adjusted EBITDA from the group's managed casinos was HKD 66.3 million, a decrease of 15.5% from HKD 78.5 million in the previous year, primarily due to temporary suspension of live mixed gaming machines for upgrades[11]. - The group managed to achieve a profit of HKD 23.8 million for the period, compared to HKD 26.3 million in the previous year[8]. - The group recorded a profit of HKD 23,800,000 for the six months ended June 30, 2019, a decrease of 9.5% from HKD 26,300,000 for the same period in 2018[13]. - Net profit for the period was HKD 23,793,000, compared to HKD 26,321,000 in the previous year, indicating a decrease of 9.6%[75]. Financial Position - The group's total assets as of June 30, 2019, were HKD 625.7 million, a decrease of 0.5% from HKD 628.7 million on December 31, 2018[31]. - Cash and cash equivalents, including pledged bank deposits, totaled HKD 301.6 million as of June 30, 2019[32]. - As of June 30, 2019, the total bank borrowings amounted to HKD 86,500,000, with an asset-to-equity ratio of 14.2%[34]. - The company's equity attributable to owners was HKD 575,520,000, slightly down from HKD 582,915,000[77]. - Total liabilities decreased to HKD 231,349,000 from HKD 254,655,000, indicating a reduction of 9.1%[77]. Cash Flow and Investments - For the six months ended June 30, 2019, the net cash generated from operating activities was HKD 37,011,000, compared to HKD 35,067,000 for the same period in 2018, representing an increase of approximately 5.5%[84]. - The company reported a net cash outflow from investing activities of HKD 24,517,000 for the six months ended June 30, 2019, significantly improved from HKD 54,352,000 in the same period of 2018[84]. - The company’s investment in property, plant, and equipment for the six months ended June 30, 2019, was HKD 10,009,000, compared to HKD 7,184,000 in the same period of 2018, indicating a focus on capital expenditure[84]. - The company reported capital expenditures on property, plant, and equipment of 10,101,000 HKD for the six months ended June 30, 2019, compared to 13,110,000 HKD for the same period in 2018, indicating a decrease of approximately 22.9%[169]. Shareholder Information - The group’s directors and senior management held a total of 630,960,880 shares, representing approximately 59.96% of the issued shares as of June 30, 2019[47]. - As of June 30, 2019, major shareholders include August Profit Investments Limited with 630,836,720 shares (59.95%), and FIL Limited, Pandanus Partners L.P., and Pandanus Associates Inc. each holding 77,504,000 shares (7.37%)[53]. - The company had a total of 1,052,185,000 shares issued and fully paid as of June 30, 2019, unchanged from previous periods[194]. Corporate Governance and Compliance - The company has complied with the corporate governance code during the six months ending June 30, 2019, with some deviations noted[61]. - The mid-term report and unaudited consolidated financial statements for the six months ending June 30, 2019, were reviewed by the audit committee and independent auditor Deloitte[64]. - The company has adopted a share option scheme to incentivize qualified participants, with a total of 105,218,531 share options available for issuance, representing 10% of the issued shares as of May 25, 2017[49]. Research and Development - The group is focused on R&D to enhance its product offerings and aims to expand its market share in the global gaming industry[29]. - Research and development expenses for the six months ended June 30, 2019, amounted to HKD 44,247,000, compared to HKD 30,289,000 in the same period of 2018, marking an increase of 46%[155]. - The group increased its investment in new and upgraded ETG gaming machines, leading to R&D and other costs rising from HKD 29,700,000 to HKD 42,600,000 for the six months ended June 30, 2019[12]. Lease and Financial Reporting - The company has adopted the new Hong Kong Financial Reporting Standard 16 regarding leases, which may impact future financial reporting[91]. - The group recognizes right-of-use assets separately in the consolidated statement of financial position[100]. - Lease liabilities are measured at the present value of unpaid lease payments at the lease commencement date, using the incremental borrowing rate if the interest rate is not readily determinable[103]. - The group recognized lease liabilities of HKD 22,150,000 and corresponding right-of-use assets of HKD 22,150,000 upon the initial application of HKFRS 16 on January 1, 2019[119].

Financial Performance - The company achieved a 9.8% year-on-year increase in gaming revenue from its managed casinos in 2018[14]. - The total revenue for the year ended December 31, 2018, was HKD 1,164.2 million, an increase of 15.1% compared to HKD 1,011.8 million for the year ended December 31, 2017[22]. - The adjusted EBITDA for the year was HKD 120.7 million, a significant increase of 429.4% from HKD 22.8 million in the previous year[25]. - The gaming revenue from the managed entertainment venues increased, with the Golden Century Entertainment venue generating HKD 780.2 million in 2018, up from HKD 681.8 million in 2017[22]. - The adjusted EBITDA from the managed entertainment venues was HKD 197.6 million, a 49.6% increase from HKD 132.1 million in 2017, driven by increased gaming revenue[28]. - The group recorded a profit of HKD 53.2 million for the year ended December 31, 2018, compared to a loss of HKD 47.5 million for the year ended December 31, 2017, primarily due to increased revenue from entertainment management services and sales of electronic entertainment equipment and systems[30]. - The total gaming revenue generated by the Golden Dragon Casino was HKD 1,431.3 million, a 14.5% increase from HKD 1,249.7 million for the year ended December 31, 2017[37]. Revenue Segments - The total revenue from the entertainment equipment and systems segment increased by 156.7% year-on-year[14]. - The company sold electronic entertainment equipment and systems generating revenue of HKD 88.7 million in 2018, compared to HKD 22.8 million in 2017[22]. - Revenue from the sale of electronic entertainment equipment and systems reached HKD 88.7 million, a 289.0% increase from HKD 22.8 million for the year ended December 31, 2017[41]. - Revenue from leasing electronic entertainment equipment and systems decreased by 51.6% to HKD 5,900,000 in 2018 from HKD 12,200,000 in 2017[42]. Market Position and Strategy - The company maintains a unique competitive advantage through the synergy between its two main business segments: casino management services and entertainment equipment and systems[10]. - The company is a leading supplier of entertainment equipment and systems, focusing on developing innovative technologies to enhance gaming efficiency[10]. - The company holds a dominant position in the Macau ETG market as the sole supplier of the patented live hybrid gaming machine system[10]. - A strategic agreement was established with IGT to transfer certain patents and related technology rights, generating non-refundable upfront payments[10]. - The company is preparing to launch high-tech ETG products and slot machines in both Macau and overseas gaming markets[10]. - The company is developing new electronic table games (ETG) and slot machines, which are expected to launch in the market soon[19]. - The group plans to launch new live mixed gaming machine products to optimize gaming table efficiency and has several new slot machines ready for market[47]. Visitor Trends and Market Dynamics - The number of visitors to Macau increased by 9.8% year-on-year in 2018, reaching a record high of 35.8 million[15]. - The proportion of VIP gaming revenue in Macau decreased from 56.7% in 2017 to 54.8% in 2018, indicating a shift towards mass market gaming[15]. - Macau's total gaming revenue increased by 14.0% year-on-year in 2018, driven by a stable Chinese economy and infrastructure improvements[46]. Corporate Governance and Management - The company has a strong commitment to corporate governance, as evidenced by the presence of independent non-executive directors on the board[99]. - The management team has extensive experience in various sectors, including technology and finance, with over 28 years in management and investment[71]. - The board of directors includes experienced members with over 20 years in finance and accounting, enhancing the company's governance and strategic direction[97]. - The board believes that corporate governance is key to the company's success and has adopted various measures to ensure high levels of governance[176]. - The board has established a nomination policy to ensure suitable candidates are nominated for director positions, with regular reviews and recommendations provided to shareholders[191]. - The company has a governance function that includes regular reviews of corporate governance practices and compliance with legal and regulatory requirements[187]. Financial Position and Assets - As of December 31, 2018, the group's total assets increased by 8.8% to HKD 628,700,000 from HKD 577,800,000 in 2017, primarily due to a profit of HKD 53,200,000[52]. - The group held cash and cash equivalents of HKD 264,800,000 as of December 31, 2018, including HKD 132,900,000 in fixed deposits[53]. - The group's debt-to-equity ratio increased to 14.5% in 2018 from 0.5% in 2017, mainly due to bank mortgage financing[57]. - The group has pledged assets worth HKD 132,900,000 for bank loans as of December 31, 2018[61]. - As of December 31, 2018, the group has no contingent liabilities[65]. Shareholder Information - The company proposed a final dividend of HKD 0.025 per share for the year ended December 31, 2018, totaling HKD 26,305,000 based on 1,052,185,315 shares issued[89]. - As of December 31, 2018, the company's distributable reserves amounted to approximately HKD 572,212,000, including retained earnings of about HKD 1,068,388,000, offset by accumulated losses of approximately HKD 496,176,000[96]. - The company reported a significant increase in the number of shares held by executive directors, with Mr. Chen holding 630,960,880 shares, representing 59.96% of the total issued shares[109]. Community and Social Responsibility - The group has a strong focus on community service and social contributions through its executives[72]. - The group made donations amounting to HKD 49,000 for the year ended December 31, 2018[164]. Risk Management - The company faces potential risks and uncertainties that may impact future business development, as discussed in the annual report[85]. - The company has established internal compliance and risk management policies to ensure adherence to all relevant laws and regulations[131].